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Bank Relationship, Corporate Structure and Firm Performance: Evidence from Japanese Real Estate Companies during the Land Price Bubble

By Asst. Prof. Pattarake Sarajoti, Ph.D., Finance Faculty, Sasin School of Management Piman Limpaphayom, Ph.D., CFA, Visiting Faculty at Sasin School of Management; Associate Professor of Finance at Portland State University Friday August 5, 2022, 12:00 -13:00 pm. Venue: Room 201, Sasin School of Management. Please register here to reserve your seat. Summary: This paper contributes to the ongoing literature that examines corporate structure and firm performance. Based on the data on Japanese firms from 1980 to 2019, we find that being a member of keiretsu network; a unique corporate environment, financing structure has influences on firm performance, profitability, and investment decisions. There is a positive relationship between financial leverage and keiretsu status, but keiretsu firms tend to carry a lower level of financial leverage during a period of economic slowdown. Consistent with prior studies, we find that real estate keiretsu firms have larger capital investments than independent firms, even during a period of economic stagnation. Although keiretsu firms tend to have a lower level of profitability, they tend to perform better, as measured by ROA and Tobin’s q, than independent firms during the post-bubble period. Authors: Piman Limpaphayom, Pattarake Sarajoti and Noriyoshi Yanase   For more information please contact Khun Nanthapak Pinyo at 091 479 4551, 02 218 4036 or researchseminar@sasin.edu.